Japan in the 20th century : The Occupation's "Reverse Course"

Photographic book - Japan - 8/04/19

Japan in the 1950s

San Francisco treaty

With the rise in the late 1940s of the Cold War (the struggle between the United States and its allies and the USSR and its allies), the American desire to reform Japan was overtaken by a desire to turn the country into a strong ally. The resulting change in occupation policy is often called the “reverse course.” In 1947 and 1948 the U.S. government in Washington decided to actively promote the recovery of Japan’s devastated economy. The American occupation reversed its policy of breaking up big business concerns, and it encouraged the Japanese government to adopt anti-inflation policies and to stabilize business conditions through fiscal austerity. Conservative political leaders like Yoshida, who hoped to restore Japan’s position in the world as an economic power, welcomed the change in direction. With assistance from the United States, the Japanese government also began to crack down on the domestic Communist movement and curb the activities of radical labor union groups.

In September 1951, after more than a year of consultation and negotiation, Japan, the United States, and 47 other countries signed a peace treaty in San Francisco returning Japan to full sovereign independence.

Japan renounced all claims to Korea, Taiwan, the Kuril Islands, Sakhalin, and the country’s former mandates in the Pacific, as well as all special rights and interests in China and Korea. The treaty also established U.S. trusteeship of the Ryukyu Islands, including the island of Okinawa, which the United States had occupied during the war. In return, Japan was not subjected to punitive economic restrictions.

In light of its fragile economic position, it was permitted to make reparation payments to the countries it had invaded and occupied in goods and services rather than in cash.

The San Francisco treaty, however, failed to resolve Japan’s relations with the Communist adversaries of the United States—the USSR and China. The USSR refused to sign the peace treaty, maintaining that it would lead to a resurgence of Japanese militarism..